This is a really depressing, bad news item. Especially in the PIIGS (Portugal, Ireland, Italy, Greece and Spain), universities are facing budget cuts in the region of 20% in the next year or so. For many of these countries, the entire principle of state-funded universities is under threat:

in Spain, €485 million will be taken from education overall, and assistance to local authorities – key supporters of universities – will be reduced by just over €1 billion (total: US $2 billion; population 46 million). A spokesperson for Spanish universities said: ‘Universities have [already] limited common expenditure as much as possible. But we cannot do it any longer. We have been tightening our belts for so long [and] we try to make the most of the means at our disposal, but right now we have so little leeway [to handle these extra cuts].”

in Ireland, university pensions are being cut by 15%. Mike Jennings, general secretary of the Irish Federation of University Teachers, believes that the current situation, which has had a severe impact on many individuals’ workloads, is not sustainable. “I think something has got to give,” he says. “People are doubling up and academics can give lectures to 1,000 people if it comes to that. But we won’t be able to correct essays or give feedback to students. We are simply being starved to death, rather than having any dramatic blow to knock us out. It’s a case of death by a thousand cuts.”

the head of unit governance, autonomy and funding at the European Universities Association said that for 2012 out of 47 member countries only Norway, Finland and Germany have maintained their commitments to increasing funding for higher education.

the UK has already raised tuition fees to $9,600 ($15,000) a year, with a resulting drop in university applications, although to date this has been quite small (around 2%); however, since the UK government guarantees student loans, it has merely put off the day of reckoning, especially if the economy contracts, as expected, due to austerity measures, so there won’t be the jobs for graduates that they will need to repay their debts.

The need for reform

I could go on, but you get the picture. I’m not going to get into the debate about the stupidity of severe austerity measures to pay off bad bets by banks and bad decisions by governments who wouldn’t face reality, but I do have to say that particularly in Southern Europe (less so in Ireland) there is a good deal of room for increased efficiencies in their post-secondary educational systems.

Many turn out thousands of surplus graduates in law and philosophy for whom there are no jobs, while there is a shortage of skilled workers such as computer specialists, engineers and qualified workers for the creative industries. In many European countries, students pay no or very small tuition fees. No, I’m not arguing for closing down all law and philosophy departments, nor for the level of tuition fees in the UK, but in many of the southern European countries, there is almost open access for anyone who wants to go to university, which is fine, but no guarantee of a job afterwards as a result. In some countries (France comes to mind) university lecturers often have ridiculously low teaching commitments.

Unfortunately I fear though that the first to be cut will be what are considered ‘ancillary services’ such as learning technology support units (where they exist – many Italian universities have no such support), rather than looking to e-learning as one way to respond to a severe crisis.

What about Canada?

At this point, you may well be asking, ‘Well, what about Ontario?’ Canada’s largest province has its own financial troubles, with a $14 billion deficit in 2010–11 that is equivalent to 2.3 per cent of GDP. Net debt came to $214.5 billion, 35 per cent of GDP. As a result, the Ontario provincial government appointed a Commission led by an economist (Don Drummond) to advise it on developing a sustainable budget without privatization of health and education and without tax increases.

In my view, his report is excellent. First a matter of perspective. He states: ‘By current international standards, Ontario’s debt is still relatively small. We are a very long way from the dreadful fiscal condition of countries that have dominated the news in the past two years.’ However, he also points out that Ontario and Greece’s economies were very similar in 1985, and that economies can quickly spin out of control. Ontario’s is heading in the wrong direction and needs to be corrected.

One of the areas he looked at was post-secondary education. His conclusion: ‘The current system is unsustainable from a financial and quality perspective.’ However, he does not recommend drastic cuts to funding, but an actual increase of 1.5 per cent per annum. However, enrollment growth is anticipated at 1.7 per cent while the institutions’ costs have been rising by three per cent to five per cent. ‘Just to keep the system operating as it does now, post-secondary institutions will need both more funding and more efficiency…..The current system is unsustainable from a financial and quality perspective, as enrolment growth crowds out the funding that is available even to maintain the status quo.’

Thus the Drummond Commission recommends the following:

Contain government funding and institutional expenses;

Use differentiation to improve post-secondary quality and achieve financial sustainability;

Encourage and reward quality;

Revise research funding structures;

Maintain the current overall cap on tuition-fee increases, but simplify the framework;

Re-evaluate student financial assistance; and

Generate cost efficiencies through measures such as integrating administrative and back-office functions.

Basically, unless taxes are increased (and per-capita, Ontario spends less on post-secondary education than most of the other provinces) then universities will have to become even more efficient. This will probably mean larger classes, or a freeze on salaries, or heavier teaching loads, or less research, or a combination of all of these and other measures. What is significant though is that compared to the rest of the government areas of responsibility in Ontario, PSE comes out quite well. Enrollment growth will continue, because Drummond recognizes that this will be needed to keep the economy growing through a better educated workforce. So Ontario, although facing significant challenges, is nowhere near being in the same boat as many of the European universities. Nevertheless, there will need to be some significant changes in the post-secondary system.

Some other provinces in Canada are facing somewhat similar, but perhaps not quite so acute, challenges as Ontario, while others are able to increase expenditure on PSE without difficulty. However, because Ontario constitutes almost a quarter of Canadian GDP, all provinces in Canada will eventually pay a price if Ontario doesn’t get its economy and government budget under control. The Ontario government will finally make the decision about what to do, and may even include some tax increases, but in terms of the mandate, the Drummond Commission has done an excellent job overall in trying to protect PSE in Ontario as much as possible.

What about online learning?

The question that arises is: to what extent can online learning contribute to enrollment growth, increased efficiency, and/or maintenance or improvement of quality in Ontario? This was not discussed in the report, but it is a question that needs to be more fully explored, at least within the online learning community. Any views you may have on this topic will be most welcomed. Meanwhile I plan to do a post on this topic at a later time.

In the meantime, feel Europe’s pain. It will be particularly the students (and potential students) who will suffer the most if the universities are unable to bring about major reforms and efficiencies, because the money just won’t be there to continue the system as it is.

Tony Bates, Ph.D. is President and CEO of Tony Bates Associates Ltd, a private company specializing in consultancy and training in the planning and management of e-learning and distance education.

Currently he is Chair of the International Experts Panel for the Open University of Portugal, advisor to the Universidad de Guadalajara’s Maestría en Tecnologías para el Aprendizaje (Mexico) and to Universidad Tecnologica Metropolitana’s Magíster en Educación a Distancia (Chile). He is also a member of the World Economic Forum’s Global Advisory Council on Technology and Education.